Expanded Europe-Mexico Agreement Due to Take Effect in Early 2020

Negotiations on the updated version of the European Union-Mexico Global Agreement (EUMGA) are expected to be completed in the very near future, with the final accord being signed by the start of 2020 and its implementation shortly after, EU Ambassador to Mexico Klaus Rudischhauser said Thursday, May 9.

The agreement, which has been being carefully hammered out since 2016, will constitute a broadening of the comprehensive bilateral agreement for political and economic cooperation signed in 2000.

Speaking before a group of reporters shortly before a diplomatic reception to commemorate Europe Day – which marks the anniversary of the Schuman Declaration, issued in 1950 by then-French Foreign Minister Robert Schuman, when Europe was still reeling from the devastation of World War II – Rudischhauser said the new 40-chapter accord was all but finalized.

He said that it had been delayed because of a clause dealing with international participation in public tenders for Mexican state government projects.

Rudischhauser said that this potentially deal-breaking provision needed to be sorted out before the new comprehensive agreement could be signed.

The EUMGA, which not only covers trade and investment, but also political issues and respect for human rights, as well as labor laws and environmental protection issues, will encompass 99 percent of all goods and services traded between Mexico and the EU, including previously exempted agricultural and fishery products.

But Rudischhauser said that the issue of access to public tenders for European companies had been a serious sticking point.

He also said that it was a reciprocal policy that would allow Mexican businesses to participate in European regional tenders, which he said were valued at more than the entire Gross National Product (GDP) of Mexico

“We have finally come to an agreement (regarding this issue), and we are now ready to close the negotiations,” the envoy said.

“We needed the commitment of the state governors that they would open their markets for public projects in order to move ahead.”

Rudischhauser said that the new agreement will constitute the broadest, most modern and most comprehensive agreement that the EU has with any nonmember country.

“While the new United States-Mexico-Canada Agreement (USMCA, which will replace the now-nullified North American Free Trade Agreement, or NAFTA) further restricts trade in the automotive industry,” Rudischhauser said, “the new EUMGA will remove all tariffs on cars.”

Notwithstanding, while Europe is now Mexico third-largest trade partner, with a combined commercial exchange of about $73 billion a year, and its second-largest investment partner (after the United States), Rudischhauser said that the mounting incidence of violence, if not brought under control, could slow two-way economic ties.

He said that the first victim of violence was tourism (“People don’t want to visit places where they feel unsafe”), but that if the incidence of violence is not curtailed, it could eventually lead to investors opting to move to other countries.

Once finalized, the new EUMGA will still have to be approved by both the Mexican Congress and European Parliament, which is why the process could take another nine to 12 months to be finalized.

Rudischhauser also expressed his disappointment with a decision by the federal Mexican government announced earlier in the day regarding the construction of a multi-billion-dollar refinery in the southeastern state of Tabasco.

In his early morning press conference, Mexican President Andrés Manuel López Obrador (AMLO) announced that, after reviewing the bids presented by four international conglomerates that had been “invited” to offer tenders for the Dos Bocas refinery (including Germany’s Bechtel-Technit and France’s Technip), he had instead opted to allow the state-run oil entity Petróleos Mexicanos (Pemex) to construct the plant by itself (even though Mexico has not constructed a refinery in more than 40 years).

Rudischhauser said that international access to government tenders is important in order to ensure global competitiveness and state-of-the-art technical expertise.

In addition to trade, the ambassador said that his government is working closely with Mexico on a number of social issues, including the fight against femicide and efforts to curb undocumented migration from Central America.

Notwithstanding, Rudischhauser said that mass migration was a global social reality that now had to be accepted.

He said that antiquated, anti-immigrant views and worldwide populism posed serious threats to democratic values.

Rudischhauser likewise reiterated the European Union’s stand regarding the need to hold free and open elections in Venezuela.

“We have never recognized the (May 2018) election of Nicolás Maduro,” he said.

“We have repeatedly invited Mexico to work with us to try to pressure him to hold free elections. Mexico has a different view.”

The AMLO government has repeatedly defended the despot Venezuelan dictator, even when he refused to allow humanitarian in the form of food and medications to enter his country last February while his people are dying of hunger and disease.

Rudischhauser said that because Venezuela was an important regional power, its economic and political fates are particularly important to Mexico.

The modern-day European Union, a vision for peace that rose out of the despair of World War II, is the realization of a proposal set force in the Schulman Declaration in May 1950, calling for economic integration and a sharing of strategic resources that would “make war not only unthinkable, but materially impossible.”

The Schulman Declaration changed the destiny of Europe and laid down the fundamental framework for the modern EU.

Based on that declaration, Europe was rebuilt out of the ashes of two world wars to become one of the most prosperous, most democratic and most advanced regions in the world.

The EU’s 28 member states include Austria, Belgium, Bulgaria, Cyprus, the Czech Republic, Croatia, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, the Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden and the United Kingdom (which is currently in the process of negotiating its exit from the bloc).

The EU traces its origins from the European Coal and Steel Community (ECSC) and the European Economic Community (EEC), formed by six countries in 1958.

In the intervening years, the EU grew in size by the accession of new member states and in power by the addition of policy areas to its remit.

The Maastricht Treaty established the European Union under its current name in 1993.

The EU operates through a system of supranational independent institutions and intergovernmental decisions by its member states, including the European Commission, the Council of the European Union, the European Council, the Court of Justice of the European Union and the European Central Bank.

The European Parliament is elected every five years by EU citizens.

The EU has developed a single market system through a standardized set of laws that apply in all member states and the free movement of people, goods, services and capital.

The Eurozone, a single monetary union, was established in 1999 and is currently composed of 17 member states.

With a combined population of over 500 million inhabitants, the EU generates a nominal GDP of more than $17 billion annually.